Responsibility of Finder of Goods (Section 71, Indian Contract Act, 1872)

Introduction

Sometimes a person finds goods that belong to another person. The law does not treat the finder as the true owner of the goods. However, the law still gives certain rights and responsibilities to the finder.

Section 71 of the Indian Contract Act states that a person who finds goods belonging to another and takes them into his custody (keeps them with him) has the same responsibilities as a bailee (a person who temporarily keeps goods for another).

Meaning / Definition

A finder of goods is a person who:

• Finds goods that belong to another person, and
• Takes those goods into his custody (keeps or controls them).

The finder does not become the true owner of the goods. However, the finder has a better right to possess (hold) the goods than anyone else except the real owner.

Even though there is no contract between the finder and the owner, the law treats the finder like a bailee, and therefore the finder must follow the duties of a bailee.

Duties and Responsibilities of Finder of Goods

The finder of goods has the same duties as a bailee under the law of bailment.

Duty to Take Reasonable Care of the Goods (Sections 151 & 152)

The finder must take reasonable care of the goods.

This means he must take the same level of care that a careful and sensible person (a person of ordinary prudence) would take for his own goods.

If the finder fails to take such care and the goods are damaged or lost due to his negligence (carelessness), he will be responsible for the loss.

Duty Not to Make Unauthorized Use of the Goods (Sections 153 & 154)

The finder cannot use the goods for his personal purposes unless the owner allows it.

If the finder uses the goods without permission and the goods are damaged during that use, the finder must compensate (pay for) the damage.

Duty Not to Mix the Goods with His Own Goods (Sections 155–157)

The finder should not mix the goods of the owner with his own goods.

Mixing with owner's consent

If the goods are mixed with the owner's permission, both the owner and the finder will have a share in the combined goods according to their proportion.

Mixing without owner's consent when goods can be separated

If the goods can be separated, both parties will keep their respective goods. However, the finder must bear the cost of separating the goods and any damage caused.

Mixing without owner's consent when goods cannot be separated

If the goods cannot be separated, the finder must compensate the owner for the loss.

Duty to Return the Goods (Sections 160 & 161)

The finder must return the goods to the true owner when the owner is found.

If the finder delays returning the goods due to his own fault and the goods are damaged or lost during that time, the finder will be responsible for the loss.

Duty to Return Any Increase or Benefit from the Goods (Section 163)

If the goods produce any increase or benefit, the finder must return it along with the goods.

Example:
If a person keeps a cow for the owner and the cow gives birth to a calf, the finder must return both the cow and the calf.

Duty Not to Deny the Owner's Title

The finder cannot claim that the goods belong to someone else when the true owner demands them.

However, if the finder returns the goods honestly to a person who appears to be the owner, he will not be responsible if that person later turns out not to be the real owner.

Rights of the Finder of Goods

The Indian Contract Act also gives certain rights to the finder of goods.

Right to Possession Against Everyone Except the True Owner

The finder has the right to keep the goods against everyone except the true owner.

This means that until the owner is found, the finder has a better right to the goods than any other person.

Right of Lien for Expenses (Section 168)

A lien means the right to retain (keep) the goods until certain money is paid.

The finder can keep the goods until the owner repays the expenses spent on protecting and preserving the goods.

However, the finder cannot file a lawsuit (legal case) to recover those expenses.

Right to Reward if Announced (Section 168)

If the owner has announced a reward for returning the lost goods, the finder can:

• Claim the reward, and
• Keep the goods until the reward is paid.

The finder can also file a legal case to recover the reward.

Right to Sell the Goods in Certain Situations (Section 169)

The finder can sell the goods if:

• The goods are perishable (likely to spoil quickly), or
• The goods are likely to lose most of their value.

The finder can also sell the goods if:

• The owner cannot be found with reasonable effort, or
• The owner refuses to pay the lawful expenses of the finder, and
• The expenses of the finder amount to two-thirds of the value of the goods.

Practical Example

Suppose Ravi finds a lost wallet on a bus.

He takes the wallet home to keep it safe and tries to find the owner.

Under the law:

• Ravi must take reasonable care of the wallet.
• He cannot use the money inside the wallet.
• He must return the wallet when the owner is found.

However, Ravi can keep the wallet temporarily until the owner pays the expenses Ravi incurred while protecting the wallet.

Summary

• A finder of goods is a person who finds goods belonging to another and takes them into his custody.
• Under Section 71, the finder has the same responsibilities as a bailee.
• The finder must take reasonable care of the goods.
• The finder cannot use the goods without permission.
• The finder must not mix the goods with his own goods.
• The finder must return the goods and any increase or benefit from them to the true owner.
• The finder has the right to keep the goods against everyone except the true owner.
• The finder has a lien (right to retain goods) for expenses spent on protecting them.
• The finder can claim a reward if the owner has offered one.
• In certain situations, the finder may sell the goods, especially if they are perishable or the owner cannot be found.